TLDR
- North Dakota Senate passed House Bill 1447 regulating crypto ATMs with a $2,000 daily transaction limit
- The bill requires operators to be licensed as money transmitters and use blockchain analytics to detect fraud
- Operators must issue fraud warnings, submit quarterly reports, and appoint compliance officers
- FTC reported crypto ATM fraud losses increased nearly tenfold from 2020 to 2023, exceeding $65 million
- The US leads globally with 29,822 Bitcoin ATMs (78% of the world market)
The North Dakota Senate has passed a bill that will create a strict regulatory framework for cryptocurrency ATMs across the state. House Bill 1447 passed with an overwhelming 45-to-1 vote on March 18 after being introduced to the state’s legislative assembly on January 15, 2025.
The bill aims to protect residents from the growing problem of crypto-related scams. It introduces several new rules for crypto ATM operators in the state. These measures come in response to the rise in fraud cases linked to these machines.
New legislation
Under the new legislation, all crypto ATM and kiosk operators must obtain money transmitter licenses to operate in North Dakota. This licensing requirement will help the state keep track of who is running these machines and where they are located.
The Senate version of the bill caps daily customer transactions at $2,000 per user across an operator’s network of ATMs. This is a compromise from earlier versions of the bill. The original proposal limited transactions to $1,000 per day.
The House had previously loosened these restrictions to allow $2,000 per day for the first five transactions within a 30-day period. The Senate version simplified this to a flat $2,000 daily limit for all users.
Before becoming law, the bill must return to the House for approval of the Senate’s changes. After House approval, it will go to North Dakota Governor Kelly Armstrong, who can either sign it into law or veto it.
The bill also requires operators to display fraud warning notices on their machines. These warnings aim to alert customers about common scams before they complete transactions. This feature directly addresses the problem of users being tricked into sending crypto to scammers.
Operators will need to monitor for suspicious activity
Operators will need to use blockchain analytics tools to monitor for suspicious activity. They must report any signs of potential fraud to authorities. This requirement adds a layer of oversight that currently doesn’t exist.
Quarterly reports on kiosk locations, names, and transaction data will be mandatory under the new rules. Operators must also appoint a compliance officer to ensure they follow all regulations. These measures create a paper trail that can help track illegal activities.
The bill’s primary sponsor, House Representative Steve Swiontek, has been vocal about the need for such regulations. During a committee hearing on January 22, he pointed out that crypto ATMs currently lack protection measures, which has “allowed criminals to exploit them for theft.”
Similar legislation has been adopted in other states. Nebraska Governor Jim Pillen signed the Controllable Electronic Record Fraud Prevention Act into law on March 13. This law also aims to combat fraud related to crypto transactions.
At the federal level, US Senator Dick Durbin of Illinois proposed comparable legislation on February 25. His proposal was sparked by a constituent who lost $15,000 to a scammer claiming the victim could avoid arrest by making a deposit at a crypto ATM.
The Federal Trade Commission has reported a troubling trend in this area. Fraud losses at Bitcoin ATMs increased nearly tenfold from 2020 to 2023. Losses topped $65 million in the first half of 2024 alone.
Older adults are particularly at risk, with consumers aged 60 and older being three times more likely to fall victim to these scams. This demographic vulnerability has added urgency to the push for stronger regulations.
The U.S. leads the world in cryptocurrency ATMs
According to data from Coin ATM Radar, the United States leads the world in cryptocurrency ATMs. The country hosts 29,822 machines, representing 78% of the global market. Canada ranks second with 3,486 crypto ATMs (9.2% of the market), while Australia is third with 1,613 machines (4.3%).
A report by TRM Labs found that crypto ATMs have facilitated at least $160 million in illicit transactions since 2019. Law enforcement agencies worldwide view these machines as major risks for money laundering and scams.
In the United Kingdom, authorities have increased scrutiny of the sector. The Financial Conduct Authority has been cracking down on unregistered operators. In 2024, they charged Olumide Osunkoya for running illegal crypto ATMs that processed $3.4 million.
Osunkoya received a four-year sentence for his role in the illegal network. He was also convicted of forgery, using false identity documents, and possessing criminal property. This case marked the first such prosecution in the UK.
Despite Bitcoin’s price growth in 2024, the number of crypto ATMs in the US has remained largely unchanged since 2022. This plateau suggests that regulatory pressures and fraud concerns may be affecting the industry’s expansion.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
